Woman shares 'snowball' method she used to pay £53,000 of debt in two years
One woman has shared how she managed to pay off debts worth $68,000 (£53,000) in just 18 months.
Jillian, who is based in the US, took to social media to share the "snowball" tip which she used to clear her debts. The method requires you to list all of your debts from the smallest amount to the biggest. You then pay the minimum payments you can on every single one, and any extra you put towards paying off the smallest debt.
It's important you don't miss any repayments. She explained: "You list all your debts, the smallest amount owed to the biggest amount owed. You pay minimum payments on everything and anything you can squeeze out of your budget and from your additional jobs you put towards the principle of the small one."
In the video, posted to her TikTok account @budget.crushing.mama, she explained once you have paid off the small one, you then move both of those payments onto the second one, and then onto the third one and this is what creates the "snowball" effect. She said: "Once you finish that, you roll both of those payments into the principal of the second one. Once you finish the second one, you put both of those payments into the principal of the 3rd one."
She noted that the average time to get out of debt is between 18 to 24 months if you were "intentional with your money and your time." This means you adjust your lifestyle to pay off the debts which includes picking up extra work and budgeting your everyday spending.
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Jillian captioned the post: "The debt snowball!!! My preference to the avalanche. Little wins, lead to big wins! £53k ($68K) paid off using this method." The "avalanche" method mentioned by Jillian in her caption is another similar debt-tackling strategy which involves someone making minimum payments on all their debts and using any extra cash to pay off the debt with the highest interest rate.
According to experts at Investopedia, the method you choose depends on your financial circumstances. In terms of saving money, the debt avalanche method works better as it works on eliminating the debt which is building more debt quicker - However, others find the debt snowball method better because it can be more motivating to see a smaller debt paid off more quickly.
If you want to tackle debt through either of these methods, Investopedia says you should weigh the pros and cons of each plan to see which one would work best for you.
If you’re experiencing problem debt or are feeling stressed about money, reach out for help and speak to someone about what you’re going through. The sooner you do this, the sooner can get your finances back on track.
You can contact the UK's largest debt charity StepChange for help. You can use its online debt advice service through its website: Stepchange.org 24 hours a day, 365 days a year, or call 0800 138 1111, Monday to Friday 8am to 8pm and Saturday 8am to 4pm.
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